Management needs to lift productivity on its own

Come the election there may indeed be more flexibility in the industrial relations system. But the system does not excuse management and the workforce from doing the hard yards today.
Photo: Jessica Shapiro

by
Peter Roberts

If you listened to business leadership groups you would think that unions and the Fair Work Act are all that is standing between Australia and a renewed leap in productivity.

But it took an Australian Financial Review/GE Australia 2.0 productivity forum to demonstrate that businesses at the coalface have little time for such arguments – they are too busy working hard within their operations to make them run more effectively.

While the FWA failed by not linking wage rises to productivity improvements, the fact is business has to operate within the situation it finds itself.

And many are finding unionised workplaces and the FWA no impediment to their own efforts to boost productivity.

An example is the unionised
GM Holden
assembly plant at Elizabeth in South Australia where management led a process that achieved a 15 per cent improvement in workforce productivity.

Most of the plant used to work on two shifts, but GMH combined final assembly into a single shift operation and conducted a radical overhaul of individual work patterns to achieve the lift.

To achieve this the assembly line was speeded up and each worker was given a smaller number of tasks to perform on the 400-plus cars manufactured each day.

Fewer tasks meant tasks were performed right first time more often. More importantly GMH was able to provide training and the right tools to allow each staffer to spend more of their precious time doing something useful to the cars.

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This is called time spent adding value, with the higher velocity of the plant and workforce busier on productive work combining to give the 15 per cent gain.

It is true there has been some assembly line grumbling that they are working harder, but the unions and staff understand that the car industry has its back to the wall, and must work smarter if GMH is to remain a local manufacturer.

This demands constant improvement in product, process and workforce productivity.

It is not a trivial act for management to develop such a successful productivity plan, nor for the workforce to embrace it.

But so far an unspoken pact is holding between the stakeholders in the Australian car industry as seen in Adelaide – the government, the company and the workforce.

The government is backing the industry with government money, the company is spending more than $1 billion on new equipment and two new local models, and the workforce is doing its bit.

Come the election there may indeed be more flexibility in the industrial relations system. But the system does not excuse management and the workforce from doing the hard yards today.